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Protecting Your Elder Law Clients’ Assets from Unintended Recipients

One of the many beautiful things about reaching our golden years is that, ideally, we’ve put the follies of our younger years behind us. When clients come to your elder law practice they have probably reached an age where they’re settled. They’re making plans for living out their retirement, how they’ll manage their long-term and end of life care, and who will obtain their assets of value after they pass away.

As these plans are made, your clients shouldn’t be plagued by issues of the past. However, it isn’t just about them when there are assets to be gained. And without the proper provisions in place, your clients’ hard-earned assets can fall into the wrong hands because of the circumstances of their surviving children or other designated estate or trust beneficiaries.

Protecting your client families from divorce, creditors

Consider this scenario: Martha was successful her entire adult life. She worked hard to provide for her two children during her working years, and to leave them something substantial when she was gone. Their father, Martha’s husband, passed away many years ago and had no will or estate plan in place. Therefore, Martha was even more determined to make sure that she left all that she could to her children for the benefit of them and their own children.

Martha’s daughter, Amanda, was happily married and pregnant with her first of three children when Martha established her estate plan. Her son, Jonathan, was a successful stock broker making a good living. In establishing her trust and estate plans, Martha had no cause for concern that the money she intended to leave her children would fall into unintended hands.

Seven years after Martha established these plans, however, she passed away. At that time, Amanda found herself embattled in a bitter and contentious divorce. In making her estate plans, Martha had made no provisions to keep her hard-earned money out of the hands of Amanda’s ex-spouse should the two divorce. Now, Amanda’s soon-to-be ex-husband is trying to stake a claim in some of her mother’s assets. Amanda will have to hire legal counsel to protect the monies, and this could ultimately end up costing her everything her mother had intended to leave to her.

Clearly, this isn’t the scenario Martha envisioned when she completed her estate and trust planning with her elder law attorney. But these are the exact types of circumstances that make proper planning crucial from the beginning.

Special provisions in your clients’ trust and estate plans and putting special protections in place can help to protect family money and keep it out of the hands of unintended recipients in the event of your client’s death.

These types of provisions can prevent your client’s assets from “creditors and predators,” or from:

  • Benefitting their children or heirs divorcing spouses
  • Supporting a child or beneficiary’s drug or gambling addiction
  • Benefitting opportunistic parties and/or litigators

Whether you are a seasoned or new elder law attorney, it’s important that you understand the importance of these legal strategies for estate planning when working with your clients. It is your job to make sure their assets are covered from circumstances such as those outlined above, and many others.

In our Symposium session, “Why Elder Law Clients Have to Worry About Divorce, Addiction, and Unknown Creditors,” you will learn what creditor protection really means and its importance for elder law clients. You’ll also discover how to include creditor protection provisions in your clients’ plans for Medicaid Asset Protection Trusts, Veterans Asset Protection Trust, and Medicaid Family Protection Trusts.

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